Should You Hire a Tax Debt Attorney? Three Ways to Decide

Many people in need of tax debt help may pay any price to get assistance, and thus hire a tax debt attorney. While this certainly decision is understandable, hiring a tax lawyer in some cases may be premature or even unwise. At the very least, working with a tax lawyer is bound to be expensive, with fees ranging from $250 to $700 per hour.

Other tax debt resolution pros, such as Enrolled Agents, charge far less than tax lawyers and may be able to accomplish the same results. In some instances, however, a good tax debt attorney is worth her weight in gold.

Here are three signs that a tax debt lawyer may be your best friend in the whole wide world:

1. You Have a Foreign Tax-Related Tax Debt Issue

When lawyers get together in a room, whatever they write up is likely to need other roomfuls of lawyers to interpret. When lawyers from different countries get together in a room with each other, and government officials are there too? Forget about it. The documents produced are bound to be completely unintelligible to anyone but a lawyer.

IRS problems related to foreign tax, that is, may be especially complex and especially lawyer-worthy. If you have investments overseas, and that is what the IRS is hitting you for, a tax debt attorney may be your only hope of understanding the rat's next of tax rules that characterizes the typical multi-country tax treaty.

2. The IRS Wants to See You in Court

Believe it or not, it is possible to prevail in court in a case against the IRS. In fact, it happens many times each year, as ambitious taxpayers challenge IRS rules or interpretations of rules and judges side with taxpayers. Taxpayers also lose cases before the tax court, as did actor Wesley Snipes, whose tax advisors advised him to stop paying taxes.

If you're even thinking about going to court against the IRS, consult a tax debt attorney immediately. Not only that, make sure the tax debt attorney is a good one, with a track record of achievement.

3. You Plan to Submit a Complex Offer In Compromise

The Offer in Compromise program operated by the IRS, whereby an individual in need of tax debt help pays part of the debt up front and the IRS cancels the remainder, can be a tricky proposition if you have significant assets. After all, if you have significant assets, why should the IRS not simply seize your assets to pay your tax debt?

The answer, often, is that significant liabilities are attached to said significant assets. You have a nice car, but you also have a big car payment. You have a beautiful home, but you have an ugly ARM mortgage that you can't refinance because your house value has declined. You have a good-looking 401K, but you're near retirement and need it.

An Offer In Compromise for someone with a checking and savings account and not much else is easy to craft, a task that can be done--and done well--by any competent tax debt pro. But if you have a lengthy balance sheet and are planning to pursue an Offer In Compromise, consider the services of an experienced tax debt attorney.

In the end, consider your situation and weigh your issues carefully. By examining all of your options, you can make the best decision possible when it comes to resolving tax problems.

About the Author:
Andrew Freiburghouse is a freelance writer and editor living in Brooklyn, NY. He has worked in a variety of fields including magazine journalism, tax preparation, screenwriting, copywriting, and real estate. He graduated from Santa Clara University in 1999 with a B.A. in English. A regular contributor at tech blog Edgelings.com, Andrew was born and raised in the City of Los Angeles. He hopes he will survive the New York winter.